New tariffs on auto parts take effect Saturday
President Donald Trump's new tariffs on auto parts are now in effect, with partial relief for vehicles assembled in the U.S.
President Donald Trump's new tariffs on auto parts are now in effect, with partial relief for vehicles assembled in the U.S.
President Donald Trump's new tariffs on auto parts are now in effect, with partial relief for vehicles assembled in the U.S.
New tariffs on auto parts are now in effect, but an order signed by President Donald Trump earlier this week offers partial relief to certain carmakers.
Trump imposed a 25% tariff on imported vehicles that took effect on April 3. On Saturday, the same duty kicked in for auto parts made overseas, but with some modifications.
On Tuesday, Trump signed an executive order offering partial reimbursement for tariffs on foreign parts for a two-year period, but only if the final vehicle is assembled on American soil. A separate order also aims to reduce the overall tariff level on vehicle imports by preventing separate duties, like those on steel and aluminum, from stacking on top of one another.
The changes aim to give automakers more time to make adjustments as the administration urges companies to increase domestic manufacturing. Several automakers say they plan to follow through.
Even with partial relief though, companies are still bracing for added costs. That could range from a $2,000 tariff for the least impacted vehicles to more than $15,000 for the most impacted vehicles, according to one analysis from Anderson Economic Group.
鈥淭he sales surge in March confirms that Americans expect prices to go up because of tariffs, and the revised AEG estimates confirm they are right,鈥� said Patrick Anderson, the study鈥檚 lead author.
General Motors cut its profit forecast for 2025 on Thursday and said tariffs would increase its costs by $4 billion to $5 billion this year.
In an interview with CNN on Thursday, G.M. CEO Mary Barra downplayed the possibility of higher prices for consumers. She said they believe pricing is 鈥済oing to stay at about the same level as it is.鈥�
But Barra also added, 鈥淧ricing changes in our industry at least monthly and sometimes more frequently, incentive levels change, etc. So we're going to respond to the market, we're going to stay disciplined.鈥�
In a separate interview with CNN, Ford CEO Jim Farley said they are in a better position than competitors because many of their cars are already American-made and they recently announced plans to build two new factories in the United States. Still, he could not rule out price increases for consumers later this summer.
鈥淚'm saying that I'm not going to be specific about our pricing, but I will say one thing: We are announcing today that we're going to extend our employee pricing through July 4. That's a big commitment. I don't know if the other competitors are going to be able to do that. But we want to keep our prices competitive and, and low,鈥� Farley said.
In addition to new vehicles, some experts warn that the tariffs on auto parts could drive up prices for car repairs.
Asked on Thursday if the Trump administration would consider additional relief, Trump's Deputy Chief of Staff Stephen Miller said, 鈥淭he question unfortunately misses the entire point which is that U.S. automakers have announced dramatic investments and expansions in the United States.鈥�